Trubion raises $52 million in low-end IPO

Drug developer is just 2nd success in Seattle area in '06

Published 10:00 pm, Tuesday, October 17, 2006

Trubion Pharmaceuticals raised about $52 million Tuesday through an initial public offering, only the second Seattle-area company to go public this year.

The IPO comes at a rocky time for new issues, especially in the biotechnology industry. Just last week, Snoqualmie-based Light Sciences Oncology delayed its plans for an IPO because of the market conditions.

In fact, Trubion sold its shares at the bottom end of its anticipated range. In its original filing, the company said it planned to raise up to $86 million.

"The market is tough and continues to be tough for biotech," said Stephen Graham, a lawyer at Orrick Herrington & Sutcliffe who specializes in biotechnology. "We have seen some glimmers of hope from time to time ... but it still remains a difficult market."

The fact that Trubion completed its IPO says a lot about the company's bankers, board members and management team, Graham said. "There is something there for people to believe in."

However, he noted that while people are rooting for a success story in Seattle, many biotech companies have faltered once they entered the public domain. "Over the last couple of years, a number of biotechs have gotten out, but not that many of them are doing that well," he said.

Founded in 1999 by former executives and scientists from Immunex, Xcyte Therapies and Chiron, Trubion is developing drugs for the treatment of cancer and autoimmune diseases.

Like most biotechnology companies, Trubion is losing money and generating little revenue. Since it was founded, it has accumulated a total deficit of $42 million, and, because of investments in research, the company wrote that it will "incur substantial and increasing losses for the foreseeable future." Revenue last year was $349,000.

But Trubion believes that its technology, dubbed small modular immunopharmaceutical, or SMIP, offers the potential for safer and more effective treatments. It is working on drugs for the treatment of rheumatoid arthritis and chronic lymphocytic leukemia.

The company plans to begin trading under the ticker symbol TRBN on the Nasdaq stock market. The two largest investors in the company are Arch Venture Partners and Frazier Healthcare -- venture capital firms that both have offices in Seattle. Before the offering, Arch owned 19 percent of the company, while Frazier owned 18 percent.

The only other Seattle-area company to complete an IPO this year is Northstar Neuroscience, which priced shares in May. Its stock closed Tuesday at $15.09, up slightly from its initial public offering price.